Saturday, March 12, 2011

The Chinese Price Inflation Picture

China's central bank continues to battle inflation by increasing reserve requirements for Chinese banks. However, they continue to print yuan to support the dollar above market levels. This money printing results in accelerating price inflation.

Chinese price inflation was reported at 4.9% in February, the same as in January. The figure was driven by food prices, up 11.0% and housing prices, up 6.1%.

1 comment:

  1. Inflation is a problem worldwide, but more so Food inflation in China would be a bigger problem. Chinese food budget as portion of their income ranges from almost 30% to 40%. Going forward I’d be watching this space closely.

    The Intrinsic Value: Food Inflation Problem